Dec 17, 2022
Guide to Geist Finance — decentralized lending and borrowing on Fantom
What is Geist Finance
Geist is a decentralized, non-custodial platform on Fantom that allows users to participate as depositors or borrowers in a liquidity market.
Depositors can earn passive income by providing liquidity to the market, while borrowers can borrow funds in either an overcollateralized or undercollateralized manner.
Geist was created as an alternative to traditional DeFi protocols like AAVE. Geist is unique in a sense where it has no governance and no venture capital funding. Instead, it operates as a revenue-earning token sharing platform, with fees distributed among token holders and liquidity providers. The protocol is also permissionless, meaning that anyone can use it on an equal basis.
Geist Token $GEIST
Geist is powered by its utility token $GEIST.
The main utility of its token is staking for protocol fees — 50% of the revenue generated from borrowing is distributed directly to users who hold GEIST. Both lenders and borrowers can earn rewards for using the protocol, which are intended to incentivize use of the platform.
$GEIST liquidity mining incentives
GEIST employs a liquidity mining mechanism similar to the one introduced by Ellipsis Finance on the Binance Smart Chain.
Rewards are vested for 3 months but can be claimed early for a 50% penalty, which is then distributed to users who choose to lock their Geist tokens for 3 months. This system helps to ensure steady rewards for those who are actively committed to the protocol.
$GEIST has a total supply of 1 billion tokens.
40% of these are being distributed as incentives to lenders and borrowers over a period of five years, while 20% are being given as incentives to Geist/Fantom liquidity providers over the same period. Another 20% are being allocated for airdrops and incentives to related DeFi communities, with a minimum distribution period of one year. The remaining 20% are being held by the team, which will release them linearly over one year.
A summary of how GEIST rewards are vested and utilized for value accrual is shown below.
Tokens supported on Geist Finance
Geist supports several high quality tokens including:
- FTM
- USDT
- USDC
- DAI
- ETH
- LINK
- WBTC
- CRV
- MIM
The total market size as of this post is US$128m.
Overall thoughts
The DeFi lending market has grown cross-chain and omnichain. Geist has emerged as the leading lending platform on Fantom and has seen zero security incidents since launch.
Its no-governance structure makes its utility token $GEIST attractive to farm, stake and earn. However, DeFi lending activity has trended down in line with macro headwinds; and it remains to be seen whether it will pick up again any time soon.
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